CRISIS-CONTAINING FACTORS OF THE PRC's DEVELOPMENT

In 2022–2023, China is entering a new stage of its development. The combination of a number of crisis-con-taining factors increases the likelihood of a large-scale socio-economic shock. Partly man-made excessive slowdown in economic development due to the "Zero COVID policy”, the ongoing and escalating US-Chinese rivalry and, in particular, the "technological war”, the over-concentration of power after the 20th Congress of the CPC, as well as the growing tension around the Taiwan problem – all together, or with the imposition of just two or three components, can lead to serious negative socio-economic consequences that will put into question Beijing's achievement of its second "centennial goal” – the establishment of the PRC as one of the leading world powers by 2049. With the exception of the domestic political sphere, China is trying to find answers to the above-mentioned challenges. In late 2022 – early 2023, Beijing removes anti-coronavirus restrictions, activates trade and economic cooperation in various formats, attempts to find out common ground between Chinese and American global interests, continues to make efforts in the European (also African, Asian, etc.) direction of its foreign policy, as well as emphasizes the high level of Russian-Chinese cooperation. At the same time, trying to provide answers to crisis-containing factors, Beijing faces both opportunities and limitations. The coming year or two seem to be most difficult for China over the last 20 years. The slowdown in the economy and domestic consumption, social protests, new challenges of the pandemic, the search for options to normalize relations with the United States, balancing between the West and Russia against the background of the Ukrainian crisis, etc. will require non-standard solutions from the Chinese leadership. Here we can expect both traditional successes and possible failures. In the near future, the political model chosen by Beijing at the 20th CPC Congress will be tested for effectiveness. © 2023 Vasily V. MIKHEEV.

BEIJING'S PAIN POINTS - 3 (The Change of Economic Model and Foreign Policy Risks)

The consequences of COVID-19, both inside and outside China, especially in the countries - major importers of Chinese products, have negatively impacted the Chinese economy. These negative socio-economic consequences forced Beijing to accelerate the transition to a relatively new economic development model, which was marked in the early 2000s. The main component of this model is the expansion of domestic consumption and, accordingly, a further increase of the contribution of this indicator to the Chinese GDP itself and of its growth rate. However, this does not mean that China will abandon economic expansion and the implementation of its foreign economic and initiatives. Their importance as structural parts of the new economic model will continue and even grow. The acceleration of the transition to the dominance of domestic consumption in economic development is additionally conditioned by the foreign policy deadlock in which China found itself at the end of 2020. Despite the world's fastest economic recovery from the COVID-19 pandemic, China has been unable to take advantage of this advantage effectively. Chinese "mask" diplomacy did not bring the desired results for Beijing - the PRC was not able to raise the leader's torch temporarily lost by the United States. On the contrary, under the influence of Western propaganda, the contradiction in the perception of China as "our own" in the market sphere and "an alien" in the sphere of ideology has intensified. At the same time, due to increased competition in high-tech markets, in particular, 5G communication technologies, the ideological "alienation" of China is beginning to be used by Western countries in market wars in their favor. The forecast of economic development both by international and Chinese experts assumes the growth rate of China's GDP in 2021 will be in the range of 6-8%. In our opinion, this is an overly optimistic estimate, and the corresponding figure will probably be 5-6%. The PRC is entering the 14th Five-Year Plan amid greater uncertainty: the prospects for the recovery of the world economy as a whole and, in particular, of the main Chinese trading partners, are not clear;limited instability is possible due to the accelerated change in the model of economic development;the volume of Chinese GDP has reached more than 15 trillion USD, therefore, each percent of its growth has become significantly "heavier" and more difficult to achieve. At the same time, the primacy in economic recovery and the continued potential for the expansion of the Chinese middle class bring positive contribution to the economic prospects of the PRC.